India: Telangana Approves 7,300 MW Renewable Energy Procurement With 8,000 MWh Energy Storage

The Telangana Electricity Regulatory Commission (TGERC) has granted in-principle approval to state distribution companies, Telangana State Southern Power Distribution Company Limited (TGSPDCL) and Telangana State Northern Power Distribution Company Limited (TGNPDCL), to procure 7,300 MW of renewable energy along with advanced energy storage systems. The proposed procurement will involve long-term power supply agreements ranging from 15 to 25 years and aims to meet the state’s growing electricity demand while supporting national renewable energy targets.

The approval follows a petition submitted by the distribution companies highlighting the need to strengthen Telangana’s future power supply. According to the Central Electricity Authority’s (CEA) Resource Adequacy Plan, the state’s annual energy requirement is expected to increase from 1,08,125 million units (MU) in FY 2026-27 to 1,77,219 MU by FY 2035-36. Peak electricity demand is also projected to rise by nearly 49.4% during this period.

The distribution companies are also preparing for the expiry of several existing power purchase agreements, which could create gaps in energy availability and peak power supply. At the same time, meeting the Ministry of Power’s increasing Renewable Consumption Obligation (RCO) targets has become important to avoid regulatory and financial penalties.

The approved procurement plan includes four major renewable energy components. The first involves 800 MW of standalone wind power under a 25-year agreement. This capacity is expected to complement solar generation and improve the overall renewable energy supply profile.

The second component covers 3,000 MW of solar power integrated with a 6,000 MWh Battery Energy Storage System (BESS), configured at 1,000 MW for six hours. The project will operate under a 25-year agreement, allowing electricity generated during periods of high solar availability to be stored and supplied during evening peak demand.

The third component includes 2,000 MW of Renewable Energy Round-the-Clock (RE-RTC) power for 25 years. This arrangement is intended to provide a more consistent renewable electricity supply and support the state’s base-load requirements. Additionally, the plan includes 2,000 MWh of Firm and Dispatchable Renewable Energy (FDRE), configured at 500 MW for four hours, under a 15-year agreement to address peak demand periods.

During the public consultation process, consumer groups and industry stakeholders raised concerns about the procurement process, demand projections and the possible impact on electricity tariffs. Some participants questioned the initiation of tendering activities before obtaining formal regulatory approval. They also highlighted the importance of promoting distributed renewable energy projects and creating opportunities for local micro, small and medium enterprises (MSMEs).

In response, TGERC directed the distribution companies to obtain prior approval from the Commission before initiating bidding for future long-term or medium-term power procurement. The Commission also clarified that DISCOMs can participate in competitive procurement processes conducted through the Solar Energy Corporation of India (SECI) or use state-level tendering mechanisms.

The selection between these routes should be based on the most cost-effective landed tariff at the Telangana periphery. The approved renewable procurement is expected to strengthen the state’s energy security, reduce dependence on conventional power sources and limit consumer exposure to rising fuel-linked electricity costs.